At the closing bell, the blue-chip index was down 235 points, or nearly 3 percent, at 7,784, the lowest close since October 1998. During heavy trading earlier in the day, the Dow industrials saw a brief rebound into positive territory before sinking again, becoming the third straight session with triple-digit losses.
In an attempt to ease investor fears, President Bush made the unusual move Monday of commenting on the stock market as well as defending Treasury Secretary Paul O’Neill. In a speech at the Argonne National Laboratory in Illinois, President Bush predicted that the market would “go back up” as stocks recover their value.
While reminding Americans that he was “not a stock broker or a stock picker,” the president said he was optimistic that corporate profits would improve and that the economy will remain strong.
President Bush also said Secretary O’Neill is “doing a fine job” after some Republican leaders speculated that he may be replaced after the November mid-term elections.
The technology-heavy Nasdaq Composite Index and the broader Standard and Poor’s 500 Index also struck new five-year lows. The Nasdaq fell 36.6 points, or 2.77 percent, to 1,282.55 and the S&P 500 fell 27.92 points, or 3.29 percent, to 819.83 — some of the worst postings since May 1997.
Monday’s stock market dip comes on the heels of Friday’s Dow plunge: 390 points. The punishing market and frustrations over recent corporate accounting scandals have led jittery investors to seek investments that they feel are less risky, such as government bonds or real estate.